There is no guarantee Masterton debt will be ring fenced from other ratepayers
The financial risks to ratepayers, especially those in Carterton and SWDC are significantly understated in the LGC proposal.
The Masterton District Council has significant debt. The three current district councils have total debt of $87m. $64m or 73% of the total debt is Masterton debt.
The LGC proposes that the Masterton debt for water schemes be ring fenced to those who benefit from the schemes until 2024. However, the debt will not be paid off by 2024 and there is no guarantee that a new single council dominated by Masterton would not change the proposed arrangement to the detriment of other ratepayers in the rest of the region.
The Masterton District Council is a member of the Local Government Funding Authority, LGFA. The Carterton and SWDC Councils made conscious decisions not to join the LGFA. By joining the LGFA the Masterton District Council has a responsibility along with the other members to underwrite the indebtedness of other members if they become unable to meet their loan commitments. There was no disclosure or evaluation of this possible risk and its potential impacts on Carterton and SWDC ratepayers.